Backers of group-rate long-term care insurance for active and retired civilian federal workers and military personnel may be on the fast track toward a compromise Republicans and Democrats can live with.

If a long-term care bill is approved this year--and remember the "if"--it could be a year or more before members of the federal family are offered coverage, which would cost less than the coverage many can now buy as individuals.

Long-term care insurance provides daily benefits--typically $100 or more--for people who need temporary or permanent assistance in performing the daily tasks of living. Premiums are based on age at the time coverage begins. But premiums don't increase after sign-up, and many plans have inflation protection.

Only about 6 million Americans now have coverage, mostly through company-backed group plans. An in-house federal program could cover 20 million or more people--civil servants, military personnel and family members--and become the forerunner of a national long-term care program.

The question isn't so much whether Uncle Sam will offer it, but rather when and in what form.

Feds who want a government program want it badly. Insurance companies are keen to participate. Politicians want the program--they and their families could participate--and the credit for making it available.

The political situation has taken a turn for the better. The big issue now is how many plans--one or a half-dozen--will be allowed to take part in the federal program. Originally, the major point of contention was whether the marketplace would determine cost and coverage or the government would have a hand in setting premiums and benefits.

Republicans favor a market approach, which would let companies offer competing benefit and premium packages to choose from. Democrats want a strong government role, with the Office of Personnel Management having the same influence it has over the successful federal health program.

But both sides appear willing to compromise enough to get the program off the ground.

Democrats say they want the government to exercise as much control over long-term care plans as private-sector employers do. Republicans want to make sure that the long-term care program, like the federal health program, will offer many choices. They don't want it to operate like the federal life insurance program, which is administered by one firm.

Both parties agree that individuals would pay the full premium for long-term care coverage. By contrast, the federal government pays about 72 percent of the average premium for workers and retirees.

Republicans first proposed a long-term care program several years ago. Then-Sen. Pete Wilson (R-Calif.) introduced legislation, but it died from lack of interest. Groups representing federal workers and retirees objected to the proposal because Wilson, who later became governor of California, wanted to let the marketplace set premiums and benefits. Employee and retiree groups, then as now, wanted the federal government to have the same role as it plays in the federal health program.

Most employee and retiree organizations also favor limiting participation to three or four companies. That way, they reason, the government could ensure that certain minimum benefits were offered and reduce the problem of younger, healthier individuals enrolling in one sort of plan while older, less healthy individuals enroll in another. Over time, that could drive some plans into bankruptcy and out of the program.

Long-term care insurance still has obstacles to overcome. But if the major issue is the number of participating plans, rather than the more touchy issue of government vs. market control, the program will be available sooner rather than later.

Benefits Seminar

Starting at 9 a.m. tomorrow, WUST radio (1120 AM) will feature a two-hour, listener-participation seminar on investing, health and life insurance, and taxes. The program is aimed at federal workers and retirees. At 9 a.m., investment specialist Bill Schneider will talk about what federal workers should do--and avoid--when investing in the thrift savings plan. At 10 a.m., benefits specialist Tammy Flanagan and tax expert Bob Leins will talk about getting the most out of the federal benefits package.

Mike Causey's e-mail address is

Friday, July 16, 1999